Shine plans to expand after market windfall

A good day at the office: Shine Corp’s managing director Simon Morrison earned around $15 million after the law firm’s first day on the stock exchange.
Photo: Glenn Hunt

by
Alex Boxsell

Australia’s newest listed law firm,
Shine Corporation
, plans to grow its domestic litigation business and pursue acquisitions in Britain after trade in its shares began on the local stock exchange on Wednesday.

The firm raised $15 million with the issue of 15 million ordinary shares at $1 each, and transferred a further 30 million ordinary shares to applicants at $1 each. Shine’s shares closed at $1.515 on Wednesday and at $1.50 on Thursday.

At $1 per share, Shine had a market capitalisation of $155 million.

After windfall, bosses want bigger and better

The listing represented a financial windfall for the firm’s major shareholders – managing director
Simon Morrison
and executive director
Stephen Roche
– who reduced their stake in the business from 93 per cent to 65 per cent and earned about $15 million each in the process.

Mr Morrison said he and Mr Roche had a long history of reinvesting in the business, which has traditionally focused on personal injuries claims. Shine will now also target new areas of litigation, including class actions, as well as offshore expansion.

“In five years’ time we want to have a much bigger and more diversified litigation practice than we have now, both inside and outside Australia," Mr Morrison said. “We’ve been looking at the UK for over ten years as a potential market. In the last 12 months we’ve had a more serious look at particular practices over there. There is a shortlist of about four that we are keen on and one in particular we’ve been spending a lot of time on."

Now the third-largest domestic plaintiff law firm behind
Slater & Gordon
and
Maurice Blackburn
, Shine has come a long way since it was set up by former Queensland attorney-general
Kerry Shine
in Toowoomba in 1976.

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Slater moves on Britain

The firm’s listing also comes a week after larger rival and the world’s first listed law firm, Slater, announced plans to more aggressively expand in Britain.

Slater has conducted a capital raising to purchase two UK law firms and the personal injury practice of a third, to add to its initial purchase of British firm Russell Jones & Walker in April 2012.

Slater is already an enormous competitor for Shine in the Australian personal injuries market. But Mr Morrison said his firm will differentiate itself from Slater because it does not have a strong connection to trade unions, nor is it interested in pursuing other consumer law areas such as family law and conveyancing. “So far as growth is concerned, I take my hat off to [Slater]," he said.

“They have pulled off some very big acquisitions, both here in Australia and offshore. Our strategy as a business has been a lower level of risk when it comes to acquisitions."

Mr Morrison said his firm, and listed legal entity Integrated Legal Holdings, owed a debt to Slater and its managing director
Andrew Grech
for “being a first mover and educating the market".

But he is not surprised the local ­market has not seen more listed law firms, despite Slater’s success since it listed in May 2007.

“One of the key things that helps a law firm get to that landing is the ratio of equity owners to lawyers in the business," he said. “We had two major shareholders that owned 93 per cent of the shares for a firm of 600 people, so it was easier to get to that landing. If you were a commercial law firm with 50 partners, it is much more complicated."

Mr Morrison said it will be difficult adjusting to a new world of financial disclosure.

On Monday Shine released annual reports for the previous three financial years. They show revenue was $88.4 million for the 2011-12 financial year and $48.8 million for the six months to December 31 last year.
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